Cities 29 (2012) 107–117

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Cities

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Local state and administrative urbanization in post-reform China: A case studyof Hebi City, Henan Province

Yungang Liu a,⇑, Guanwen Yin b, Laurence J.C. Ma c

a Guangdong Key Laboratory for Urbanization and Geo-simulation, School of Geography and Planning, Sun Yat-sen University, Guangzhou 510275, Chinab Graduate School of Humanities, Kyushu University, Fukuoka 8128581, Japanc Department of Geography and Planning, University of Akron, Akron, OH 44325, USA

a r t i c l e i n f o

Article history:Received 17 November 2010Received in revised form 31 May 2011Accepted 14 August 2011Available online 13 September 2011

Keywords:Administrative urbanizationLocal stateCity-makingHebi CityChina

0264-2751/$ - see front matter � 2011 Elsevier Ltd. Adoi:10.1016/j.cities.2011.08.003

⇑ Corresponding author.E-mail addresses: liuyung@mail.sysu.edu.cn (Y. L

(G. Yin), laurencejcma@yahoo.com (L.J.C. Ma).

a b s t r a c t

China’s rapid growth over the last three decades has attracted much academic attention. In thepost-reform era, economic growth has been paralleled by rapid urbanization. China’s urbanization expe-rience has been shaped heavily by the state through national urban policies as well as through localadministrative means. Much has been written about large Chinese cities in the more developed coastalregions, such as Beijing, Shanghai and Guangzhou, but little is known about the process of city-makingin medium-sized and small Chinese cities, especially those in the less developed central and westernregions of the country. This paper sheds light on the processes of urban transformation in Hebi, a med-ium-sized inland city in Henan Province, emphasizing the critical role that the local state has played incity-making, the mechanisms and processes of change, and the resultant impacts on the city. As a miningcity, Hebi has been threatened by depleting natural resources. To invigorate the city, a new city center hasbeen built to attract new enterprises. Through intensive interviews and fieldwork conducted in 2007 and2008, we examine what the city government of Hebi has done to turn the newly constructed urban spaceinto a new administrative and economic center of the city. With the establishment of new enterprises, thelocal economy has been diversified, although coal continues to be a major component of Hebi’s economy.The role of the local state in the production and development of the new urban space is direct and force-ful. As local state policies on urban development have been implemented by strong administrativemeans, we conceptualize the contemporary Chinese model of urbanization as ‘‘administrative urbaniza-tion’’. One problem with this kind of state-dominated urbanization and city-making is that the needs ofthe people are not fully considered, and it is unclear who the major beneficiaries are. More case studiesare needed to determine how economic and political forces are driving China’s land-based urban devel-opment, the extent to which local states are understood as entrepreneurial, profit-seeking and pro-growth, the relationship between the local state and other stake-holders in local urban development,and who has benefited from administrative urbanization.z

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Introduction

It is widely known that industrialization and tertiary servicesare major driving forces of urbanization. In the development ofWestern cities, the role of such economic forces in urban growthis clearly evident. However, in the Western context, the effect ofthe state and government on urban development is limited to suchactivities as city planning, the construction of public transportationsystems, the provision of social services, and the maintenance ofpublic security. The local state is rarely involved in fundamentallyaltering the nature of a city. In contrast, the impact of variousadministrative levels in China’s governments on urban change is

ll rights reserved.

iu), yingw@lit.kyushu-u.ac.jp

very strong. As China has risen to be the second largest economyin the world, the wisdom of uncritically following neo-liberal tractsof urban development has been challenged, and an alternative Chi-nese model of development, encapsulated in what is known as the‘‘Beijing Consensus’’, has been proposed to replace the neoliberal‘‘Washington Consensus’’ (Ramo, 2004). In this sense, it is impor-tant to examine the role that the state has played in the processof China’s urbanization and city-making.

Much has been written about China’s urbanization over the lastthree decades (Ma & Wu, 2005; McGee et al., 2007; Wu, Xu, & Yeh,2007). Empirically, this literature is based mainly on the develop-ment of large cities such as Beijing, Shanghai and Guangzhou, allof which are located in the more developed coastal regions. Verylittle is known about the process of city-making in medium-sizedand small Chinese cities, especially those in the less developed cen-tral and western regions of the country. This study will help fill

108 Y. Liu et al. / Cities 29 (2012) 107–117

that gap of knowledge through an examination of the process ofurban transformation in the medium-sized inland city of Hebi.Hebi is a mining center in Henan Province, where the total popula-tion in 2009, including rural residents, was 1.5 million, and the ur-ban population was 730,000 (Hebishi renmin zhengfu, 2009). Thecity’s level of urbanization in 2009 was 49.6%, which is slightlyhigher than China’s average rate of 46.4% for the same year. Thispaper will also shed light on the Chinese model of state-orientedurbanization and city-making. Conceptually, we propose that Chi-na’s urbanization process is best understood as a form of adminis-trative urbanization. In this conceptualization, the central and localstates play different roles. The central state determines the generaldirections of the nation’s urban development, designs nationalurbanization policies and sends them down through China’sadministrative/spatial hierarchy to local areas, while the local stateis the dominant decision-maker and the key player in local urbangrowth that powerfully shapes the local urban process throughadministrative means. In terms of the actual production of urbanspace, the impact of the local state is far more direct than that ofthe central authorities, and this seems to be more evident in med-ium-sized and small cities than in large ones. In addition, this studywill shed some light on how resource-based cities in China that arefaced with resource depletion are attempting to restructure theireconomies. The study also begs the question of whether the ap-proach taken by Hebi, a mining center with intensive excavationof coal for more than 50 years, can effectively bring about a newand viable local economy.

In the mainstream Western literature, city government is seenas one of several active players that work together to promotecity growth under such concepts as ‘‘growth machines’’ (Loganand Molotch, 1987), ‘‘urban regimes’’ (Stone, 1989) and the‘‘entrepreneurial city’’ (Harvey, 1989; Hall and Hubbard, 1998).For instance, in the US context, a coalition of local stakeholdersled by property owners and the local state has been defined,and an urban growth machine has been identified, in which theproperty owners are the dominant players while the local gov-ernment is no more than a facilitator. The urban regime theorystresses the partnership formed between governmental andnon-governmental actors, resulting in the stability and continuityof urban governance (He, 2003). As such, the growth machineand regime approaches highlight the influence of the businessclass in the public-private governance of urban economic devel-opment (Peck, 1995; Macleod and Goodwin, 1999). By contrast,the theory of the ‘‘entrepreneurial city’’ takes the transition ofcontemporary urban governance towards entrepreneurialism asa reaction to the crisis of capitalist accumulation (Harvey,1989; Hubbard and Hall, 1998; Duckett, 1998; Lin, 2002). The lo-cal government plays a significant role in urban developmentthrough entrepreneurial measures such as place marketing(Paddison, 1993) and the creation of new spaces, landscapesand urban images (Wu, 2003). An entrepreneurial state is under-stood to be an actor that actively works with the private sectorand is imbued with such distinctive characteristics of businessesas ‘‘risk-taking, inventiveness, promotion and profit motivation’’(Hubbard and Hall, 1998, p. 2). Although some of the featuresof urban change in Western cities can be identified in China’s ur-ban development, there are important differences between thetwo urban regimes. In this study, we emphasize the role of Chi-na’s local state in urban transformation, which differs dramati-cally from that in the Western context. As projects ofurbanization and city-making in China are almost invariablydominated by the local government, which forcefully guides theimplementation of such projects through its highly effectiveadministrative apparatus, we conceptualize contemporary China’surbanization after the 1978 economic reforms as ‘‘administrative

urbanization’’. This case study of Hebi provides some details onthe processes and consequences of this model.

In pre-reform China, the process of urban development wasshaped heavily by the central government. With institutionalforces such as household registration (hukou) and centralized eco-nomic planning, the central government strictly controlled thepopulation, growth and distribution of cities (Kirkby, 1985; Zhao,1990; Xie and Costa, 1991; Chan, 1994; Ye, 2001; Zhang and Zhao,2003). The central government thus played a key role in urbaniza-tion from the top down (Cui and Ma, 1999; Ning, 1998). Since thelate 1970s, however, China’s reform programs have focused onmarketization and decentralization, and various non-state actorssuch as township enterprises and foreign investors have playedroles in transforming Chinese cities (Zhang, 2008). Through a com-bination of neo-liberal and decentralization approaches, land re-sources in urban and peri-urban places have become increasinglymarketized while rural-to-urban migration control has been loos-ened, resulting in rapid urban expansion and redevelopment. How-ever, the introduction of market forces does not mean the retreat ofthe state in the economic sphere. On the contrary, the Chinese statecontinues to play a powerful role in post-reform urbanization (Ma,2002; Lin and Wei, 2002; Lin, 2002). Unlike in the pre-reform per-iod, however, the local government, rather than the central govern-ment, has shaped the trajectory of city development since the1990s.

Since the 1980s, China has actively promoted the growth of cit-ies. Cities have been seen as the engine of growth for the nation’seconomy. This pro-urban policy has been effectively carried outthroughout China through the omnipresent Party-controlledadministrative apparatus. All cities have been instructed to finddevelopmental resources of their own, and cities have been com-peting intensely for urban and economic growth. Because landdevelopment can generate a great deal of income to enrich a city’sfinancial base, urban renewal and the acquisition of peri-urbanland for urban expansion have become the major driving forcesfor China’s post-reform urbanization. In addition, because the fu-ture careers of local city officials depend heavily on the amount ofinvestment a city is able to generate and the way a city is mod-ernized through the construction of modern urban projects thatare visually impressive and financially rewarding (such as real es-tate development and the establishment of high-tech parks), citieseverywhere are competing to attract investors and to constructeye-catching urban designs and buildings, often with the partici-pation of foreign architects (Ren, 2011). Urban planning has beendominated by work related to property-led redevelopment. Newurban spaces such as industrial parks, modern retail and whole-sale marketplaces and housing estates have appeared in numer-ous large and medium-sized cities, all directly or indirectlyrelated to the active role that the local state has played (Ning,1998; Zhu, 2000; Wu, 2000; Wei and Jia, 2003; Ma, 2005; Zhanget al., 2006).

Although many studies have shed light on the effects of localgovernments on urban growth, detailed information based onempirical case studies that reveal the dynamics, impacts and spa-tial implications of the local state in China is still lacking. For in-stance, what is the process of city-making led by the local state?What is the mechanism and what are the tools of city-making?Can state-led urban growth lead to sound urbanization? Whatare the socio-spatial impacts of this kind of urban transformation?What are the impacts of state-led urbanization and city-makingupon the local urban landscape? To answer these questions, morein-depth empirical studies are needed, particularly for medium-sized and small cities that have been largely ignored by scholars.The details provided in this study are germane, directly or indi-rectly, to some of these questions.

Y. Liu et al. / Cities 29 (2012) 107–117 109

Data and methodology

Hebi is a mining city located in the northern part of Henan Prov-ince (Fig. 1). As a second-tier inland city, the impact of the centralstate on Hebi is much less than that of the local city government,and direct foreign investment has had little effect on city growth.In the following sections, we will first introduce the data gatheredand methods used in this study, followed by sections dealing withthe role that the city government has played in the process of He-bi’s urbanization and the production of new urban space. The im-pacts of this type of city-making will then be examined. Thepaper will conclude with some discussions of the broader implica-tions of the case study and on administrative urbanization, to-gether with some relevant questions for future research.

Data for this study came mainly from interviews and question-naires obtained through two rounds of fieldwork. In August 2007,semi-structured interviews were carried out with Hebi City’s offi-cials who were responsible for urban land use, such as plannersand designers of the city’s new urban districts, real estate inves-

Fig. 1. Map of

tors, and local residents. Information was collected on the develop-ment process of Hebi City, together with data about theconstruction of Hebi’s new city center (it later became an urbandistrict). The second round of interviews was conducted in March2008. The interviewees also included government officials and ur-ban planners, and we targeted the reasons for the development ofthe new district and the problems encountered, again payingattention to the interests of the local government. A total of 24 lo-cal officials were interviewed. Moreover, a survey of the residentsof the three districts of Hebi City was conducted; a total of 320questionnaires were distributed, with 287 valid returns (92.3%).The questionnaires were designed mainly to gather informationrelevant to the evaluation of the creation of the new district,including its housing conditions, infrastructure and the living envi-ronment. Statistical data, government documents, newspapers andlocal historical materials were also collected.

In general, both government officials and residents enjoyed thenewly designed and constructed modern urban landscape in thenewly created district, which had been designated as the new

Hebi City.

110 Y. Liu et al. / Cities 29 (2012) 107–117

political, economic and cultural center of Hebi City. While most ofthe interviewed residents expected to live there, many residents inthe new district complained about poor public services and inade-quate schools, retail, and personal services. Our fieldwork gave usthe strong impression that in restructuring the local economyand city-making, the local government was mostly interested inraising the image of the city and thus, paid insufficient attentionto satisfying the needs of the local residents.

Hebi City: Urbanization and the role of the state

Compared with cities in the more developed coastal regions,Hebi has not yet been greatly affected by the processes of global-ization that began to pick up momentum globally beginning inthe 1970s and that did not begin to impact China significantly untilthe early 1990s. Thus, the driving forces for Hebi’s urbanization areessentially local, with the local government playing a decisive role.Located in the north of Henan Province, Hebi’s history goes back toChina’s ancient times, but its rich coal resources were not welldeveloped prior to China’s First Five-Year Plan (1953–1957), andHebi was not officially designated as a city until 1957. Currently,the city governs three urban districts, namely Qibin, Shancheng,and Heshan, together with two suburban counties, Xun Countyand Qi County (Fig. 1).

With rich coal deposits, Hebi’s development has always beenbased on coal mining. The history of Hebi’s urbanization since1957 can be divided into two distinct stages. Prior to 1992, Hebi’sgrowth was mainly shaped by the policies of central planning con-trolled by the central government. After the Qibin Economic Devel-opment District was built in 1992, Hebi entered a new stage ofurbanization, with the local government powerfully shaping thepatterns of the city’s rapid change. Since then, the city has at-tempted to shift its main growth engine and the regime of accumu-lation from coal mining to new industries and real estatedevelopment.

Stage one: The impact of the central government

Historically, Hebi was a small market town. When the statedecided to develop its coal resources in 1957, Hebi was grantedofficial city status by the central government, with 202 villagesand 57,700 residents in its jurisdiction. To facilitate coal miningand the development of the city, the Ministry of Coal, throughadministrative means, recruited engineers, technicians and work-ers, together with their families, from other mining cities of China,namely Fushun, Kailuan, Jiaozuo, Fengfeng and Jingxi, and movedthem to Hebi. At the same time, to enhance the new city’s admin-istrative capability, the provincial government of Henan also mobi-lized a group of cadres and officials from cities within the provincesuch as Zhengzhou, Kaifeng, Xinxiang and Anyang, and movedthem to Hebi. As a consequence of centralized planning and the or-ganized migration of engineers, workers and their families, Hebi’spopulation rose suddenly from 76,000 in 1957 to 169,000 in1958 (Editors, 1998). The rapid growth of the city’s populationshows the administrative efficiency of the socialist regime in theallocation of human and other resources needed for mining andeconomic growth. Together with the enthusiasm of the Chinesepeople at the time to build a new socialist China, the omnipotentsocialist state and the central government were able to achieve ahigh level of economic growth and impressive industrializationduring the First Five-Year Plan (1953–1957). The phenomenalgrowth of Hebi at that time was typical of the rapid growth of citiesoriented to industrial and resource development during China’smassive socialist industrialization era.

Along with the development of coal mining, newly constructedworker villages were built in or near the mining areas. As in othermining cities, urban development in Hebi followed mining. In suchresource-based cities, the only function of the city is to serve theneeds of mining and its workers. Wherever a new mine wasopened, a state office of mining would be established at the miningsite, and a settlement would be formed in or near the mining areaafter workers and their families had been brought in. In the case ofHebi, the built-up areas of the city expanded sequentially and sep-arately following the opening of each mine, with the city’s frag-mented spatial form determined by the locations of the mines(Interview 07083001) (Fig. 2).

The case of Hebi was typical of the development of mining-based cities and clearly demonstrates the role of the central state,specifically the Ministry of Coal, in urban development during thesocialist era. In Hebi, as well as in other cities, state investment inconsumption-based urban facilities during the pre-reform periodwas kept at a minimum so as to save more capital for produc-tion-based activities, i.e., industrial, energy, and mining projects.As housing, transportation, retail, and personal services wereviewed by central planners as ‘‘non-productive’’ and ‘‘consump-tive’’, their development was kept at a minimum. With the shiftof the nation’s developmental priorities to those favoring citiesand with the decentralization of administrative and fiscal powersbeginning in the 1980s, the local state began to play a much morepowerful role than the central state in shaping China’s urbaniza-tion, as our case study shows below.

Stage two: The impact of local government on urbanization

In 1986, the central government initiated a new national policyto restructure the spatial organization of cities and their surround-ing counties. Known as ‘‘placing [suburban] counties under munic-ipalities’ jurisdiction’’ (shi dai xian), this policy enabled Hebi City toadd two counties, Xun County and Qi County, to its administrativejurisdiction. Being far from both urban and mining areas, these twoagricultural counties had a large amount of land. This rescaling ofits administrative structure allowed Hebi to have firm control overmuch more land than before, which the city has used for new ur-ban development since the early 1990s.

Since 1992, hundreds of what have been widely known as Eco-nomic and Technical Development Zones (ETDZs) have been builtall over China. Hebi also followed the national trend of establishingsuch zones and built its own ETDZ, the Qibin ETDZ in Xun County,which covered an area of about 23 sq km. In 1995, the city govern-ment of Hebi adopted a comprehensive plan for the city’s socialand economic development for the period 1995–2010, in whichthe Qibin ETDZ was defined as the new urban center and thenew engine for the growth of the city. To facilitate the develop-ment of the Qibin ETDZ, the city government of Hebi was movedto the Qibin EDTZ in 1996. This move symbolized the beginningof a new Hebi City, with its future development focused on thenew center. In 1999, all city government offices were relocatedto this new place, and the Qibin EDTZ officially changed its statusto the Qibin District in 2001.

During the pre-1978 period, the central state had strongly af-fected the development of cities, controlling their size, determiningtheir economic functions and controlling their budgets. Centralplanning excluded the possibility for cities to become self-sustain-ing economic entities capable of generating economic growth ontheir own. In the reform era, on the contrary, local governmentsare expected to play a leading role in local economic growth andto find ways to finance local growth. With capital in short supplyduring the early reform period, land was the only resource avail-able for local states to generate developmental capital. Local stateshave the power and ability to convert rural land to urban use

Fig. 2. History of urban development in Hebi City (Note: The 7th and 9th excavations were not located in Hebi).

Y. Liu et al. / Cities 29 (2012) 107–117 111

through administrative means. Urban renewal and land usechanges (largely from industrial to commercial or housing uses)have taken place everywhere in Chinese cities, resulting in massivereconfigurations of urban space and substantial financial returnsfor local governments. This land-based approach to urban develop-ment has been the key characteristic of China’s post-reform urban-ization, and Hebi is no exception.

The development of the Qibin District

In its quest for new economic growth in the reform period, thelocal state of Hebi decided to establish a new growth center awayfrom the hilly mining areas, where the environment and transpor-tation were both less than desirable. The Qibin District was built asthe new growth center for Hebi City. The construction of an ETDZat Qibin as a greenfield project in an agricultural area was far easierand more desirable than building such a center in any of the min-ing areas, where transportation and the physical environmentwere, and still are, inconvenient and unattractive. The emergence

of Qibin as Hebi’s new economic center was a deliberate act of cre-ation controlled from the very beginning by the local state, includ-ing the establishment of the Qibin ETDZ and its subsequent changeto an urban district. Mainly as a result of the construction of theQibin District, the built-up area of the city was enlarged from just15 sq km in 1992 to 49 sq km in 2009, and the city’s urban popula-tion increased from 390,800 in 1992 to 609,700 in 2009 (Fig. 3).The construction of a new urban economic area involves a numberof activities, including the development of its infrastructure, therecruitment of enterprises, the movement of population to thenew area, and numerous types of construction. These activities ofspace production and city-building in the Qibin District are dis-cussed in the following paragraphs (Fig. 4).

The construction of a new district

In 1992, Deng Xiaoping, China’s top leader at the time, made hisfamous southern tour to Guangdong Province, during which heencouraged local states to open up more and to find new ways to

1500

2500

3500

4500

5500

6500

92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09

100 per sons

15

25

35

45

55

65Km2

Urban population

Built-up area

Fig. 3. Urban population and urban land use, 1992–2009. Source: National Bureauof Statistics of China (1993–2010).

112 Y. Liu et al. / Cities 29 (2012) 107–117

speed economic growth. This call to action greatly acceleratedChina’s market reforms. The development of local economies be-came the central concern of the nation. To find developmental cap-ital, local governments became increasingly entrepreneurial inmentality and behavior. Because land was the only local resourceavailable to local governments for growth, a new land-centered re-gime of urban construction, including urban renewal and the open-ing of new EDTZs, soon appeared in numerous cities, includingHebi City. As China’s top leadership encouraged the developmentof new, high-tech and non-polluting industries, a fever for thedevelopment of such industrial districts soon swept across the na-tion. To attract new industries, the city government of Hebi real-ized that a favorable investment environment was necessary. Thecity’s old urban districts, however, were located near mountainousareas where the environment was poor and the threat of land sub-sidence due to coal mining was serious. In addition, the cost ofrevitalizing the old districts would be significantly higher thandeveloping a new area. As a result, the city decided to plan anew economic development zone, Qibin, in an area on the plains,

Fig. 4. The development of Q

making it the new engine of Hebi’s local economic growth (Yao,1994). To guide the development of the Qibin EDTZ, a leadershipgroup consisting of officials from various government units wasformed. In December 1992, the Henan provincial government ap-proved the plan to establish the Qibin EDTZ, and the Hebi govern-ment was authorized to raise money and take other steps to beginits construction (Document of Henan Provincial government, No.[1992] 259).

Infrastructure construction of the new center

It was not easy to develop a new economic and administrativecenter some 20 km away from the old city center. The local stateled the efforts to construct the Qibin EDTZ. The first challengewas to build a new system of infrastructure for the new area. In1992, the annual income of Hebi City was 140 million yuan, ofwhich only 4 million yuan could be used for urban construction(Interview 07082802). This level of state finance was grossly inad-equate and forced the Hebi government to find alternative sourcesof funding to develop the new area.

To do so, the Hebi government took the following measures.First, as in other cities in China, the local government auctionedoff land use rights to enhance its financial base. In 1992, followingthe central state policy allowing the sale of urban land use rights,the government of Hebi promulgated two policies, known as ‘‘Pro-visional Measures on the Administration of State-owned Land Use’’and ‘‘Decisions on Encouraging the Development of Land in theEDTZ’’. These two policies ended the traditional socialist policy offree use of state-owned urban land in Hebi. The first policy allowedurban land use rights to enter the market and set standards fordetermining the price for auctioning land use rights according tolocation, environmental conditions, and other factors. However,the ownership of urban land continues to belong to the state andis not marketable. The second policy established five levels of landprice for auction, ranging from 189 yuan to 247 yuan per sq m (Edi-

ibin District, Hebi City.

Y. Liu et al. / Cities 29 (2012) 107–117 113

tors, 2007). Subsequently, the land use rights of all of the land inthe Qibin EDTZ were auctioned off. Second, the local governmentof Hebi went beyond state finance to seek funding from othersources for project construction at Qibin. Loans from various chan-nels, such as national banks, foreign banks, and corporations, wereobtained. For instance, about 80 million yuan was borrowed fromthe China Development Bank to build some of Qibin’s infrastruc-ture, four million USD was loaned by the Canadian governmentto build the No. 2 heat-supply substation and some two millionyuan was collected from donations by local residents and was usedto construct the New Century Plaza (Zheng, 2008) (Table 1). As inother cities, under the central state’s decentralization policy, thecity government of Hebi enjoyed a great deal of administrativeand financial power in managing local affairs, including urbandevelopment. Because the leadership team was highly efficientand strongly motivated by the potential benefits for the city andtheir careers, the entire process of developing the Qibin EDTZ,including planning, project designs, and the construction of infra-structure such as transportation, utility lines, and communication,was completed in a few short months.

Third, the local government encouraged investors to becomedeeply involved in the development of Qibin by providing themwith incentives. This was a very successful strategy that contrib-uted to the speedy completion of Qibin’s development. For in-stance, if an investor was willing to build roads in the newdistrict, he could enjoy the right to use some extra land in Qibin.If an investor was able to rapidly build roads and facilities, he couldenjoy various advantages, such as the exemption and deduction ofselected taxes. With these measures, the local government wasable to achieve rapid development of the new center. For instance,the average speed of infrastructure construction in Qibin is threetimes faster than the average speed for China as a whole (Interview07082802). Before 1995, a total of 140 million yuan had been in-vested, of which only five million yuan had come directly fromcentral government financing, with the rest coming from non-statesources (Yao, 1994; Wang, 1995). Under the strong leadership ofthe local state and through this land-centered development strat-egy that involved a public-private coalition with funding comingfrom different sources, the city government of Hebi was able torapidly complete the development of the Qibin EDTZ.

Local state’s strategies to attract businesses and investment

The next step was to attract appropriate enterprises and invest-ment to the new center. At the beginning, only 20 small enterpriseswere set up in the city center, most of which were townshipenterprises that produced and sold agricultural products. Theseenterprises were subsequently deemed to be low-level, whichwere viewed by the local state as incompatible with the nationalpolicy of developing new, clean and high-tech industries. To com-pete with other cities for new investment and new industries, thelocal government of Hebi adopted the following strategies.

Table 1Sources of project financing in Qibin EDZ. Source: Understanding Hebi new city.

Project Sources Funding

Qihe Highway Bridge Loan from the World BankGroup

40 millionyuan

Selected projects forinfrastructure construction

Loan from the ChinaDevelopment Bank

80 millionyuan

No. 2 heat-supply substation Loan from the Canadagovernment

4 milliondollar

Water and sewage plants Jointly developed with aFrench company

–

New Century Plaza Donations from thecommunity and its citizens

2 millionyuan

First, the local government launched a series of publicity cam-paigns to project a favorable image of the new center throughvarious advertising media, including television commercials,newspaper ads, and other marketing tools. Advertisements evenappeared on China Central Television (CCTV), the national televi-sion system of China. In addition, the use of Qibin as the venuefor soccer and basketball tournaments in Henan Province becamea selling point for Qibin (Interview 07090102).

Second, a number of new policies were set up to attract externalinvestment. Almost all local officials in Hebi were instructed to ac-tively work on attracting enterprises to the new center, and all lo-cal government units were under pressure to recruit newindustries (Interview 07090101; Gu, 1998). As Table 2 shows, from1993 to 2007, a series of policies and administrative measureswere implemented by the city to lure external capital to Qibin.These policies and measures point to the urgent need for develop-mental capital and reveal the active role that the local state playedin shaping the local economy, which directly affected the city’s ur-ban development. These efforts were quite successful. As of 2009,investment for fixed assets in the Qibin District’s industrial areahad reached 4.84 billion yuan, and some 250 enterprises had ar-rived (Hebishi fazhan he gaige weiyuanhui, 2010). These newenterprises included factories that process magnesium-relatedmetals and produce electronic goods and automobile parts. Thisindicates that the active involvement of the government of Hebiin local economic development was highly effective. In its effortsto obtain capital and recruit new enterprises, the local state in Hebiwas highly aggressive but flexible; it was willing to take risks andfocus on profit generation in land deals to attract new enterprises.These entrepreneurial behaviors of the local state of Hebi City weremotivated by the local leaders’ desire to enhance the city’s finan-cial coffers, which, together with the production of a new urbanspace with new industries, would presumably be beneficial tothe future careers of the local leaders.

Organized relocation of the population to the new district

The story of how the new area was built and how the residentswere settled in Hebi City needs to be told here. In 1994, the Hebigovernment was already determined to upgrade the Qibin EDTZto a new urban district and to relocate residents from the old cityto the new center. However, as many of the basic urban facilitiesand services were absent or inadequate and because job opportu-nities were limited in Qibin, few people were willing to move thereon their own. Because the new district required a significant pop-ulation, the Hebi government decided to move some residentsfrom other areas to Qibin.

The organized population relocation was accompanied by themovement of government offices to Qibin. First, the municipal gov-ernment’s administrative building was moved to the new districtin 1996. The local government then issued formal policies thatforced all subordinate government agencies to rent land, buildnew office buildings, and construct staff housing in the new dis-trict. The city government of Hebi required all government agen-cies to move to the new district by the year 2000. Those officialswho were unwilling or unable to comply would be dismissed(Interview 07090105). As a result, despite the very limited infra-structure and services in the new district, almost all governmentunits in Hebi, including their staff members and families, weremoved on time. In 2000, the total floor space of office buildingsconstructed in the new district had reached 89,100 sq m, and a to-tal of 298 administrative offices had constructed their administra-tive buildings in the new district (Editors, 2007).

Second, in addition to the staff and their families that weremoved to the new district, the displaced population of most ofthe residential resettlement projects in the old city’s redevelop-

Table 2Local state policies and administrative strategies to attract investment to Hebi City.Source: Gazetteer of Hebi city: 1986–2000; work summary about attracting corpo-rations of Hebi City, 2004–2006.

Year Measures and policies

1993 Established policies to encourage potential investors to visit the cityand established a system to monitor the progress of investmentprojects

1994 Established targets of investment to be attracted to the city,distributed such targets to various government agencies forfulfillment, and established rewards for those who could attractinvestment to the city

1996 Encouraged individuals to use their personal networks to attractinvestment

1998 Decided to attract investment to construct large-scale projects and tobuild specialized marketplaces

1999 Revised preferential policies for investment and land use andprovided more tax breaks

2000 Set investment targets for local state leaders; established a policy todesignate a chief representative to negotiate with potential projectinvestors; set policy to give land to road builders (‘‘exchange landwith road’’)

2002 Distributed investment targets to various agencies to be included inmonthly statistical reports

2004 Designated this year as the year for attracting investment; the threeone-third system

2005 Established more policies to attract investment and improvedinvestment services

2006 Encouraged investment in specialized industries and businesses2007 Used festivals to attract investment; established work meetings on

attracting investment

Notes: ‘‘The three one-third system’’: Arrange for one-third of the main leaders ofthe government, one-third of the administrative officials, and one-third of workinghours to be used to attract corporations. Work Summary about Attracting Corpora-tions of Hebi City, 2004.

114 Y. Liu et al. / Cities 29 (2012) 107–117

ment areas, as well as the displaced residents from the regenera-tion projects in zones of subsidence caused by years of intensivecoal mining, were also moved to the new Qibin District. Some4800 households were moved from the dilapidated housing areasin the old district to the new district, and 14,749 households weremoved from the areas suffering from land subsidence (Hebishichengshiguihuaju, 2007). In addition, the residents of the new dis-trict included a number of landless peasants whose land had beenrequisitioned by the state to make room for the new district; thesepeasants resided in housing units built by the local state in Qibin(Interview 08031801). Because of these relocation efforts orga-nized by the local government, the population of the new districtincreased tenfold in 13 years, from 10,000 in 1992 to more than100,000 in 2005 (Bureau of Statistics of Hebi, 2007).

Table 3Housing conditions in the new and old districts. Source: Questionnaires.

New district (%) Old districts (%)

House formMakeshift house 3 8Single-family house 7 36Building of 2–6 stories 79 52Building of more than six stories 11 5

Living space<30 m2 3 2230–50 m2 7 2451–80 m2 11 3181–100 m2 33 10>100 m2 46 13

Support facilitiesCentral heating 48 13Water supply 95 88Power supply 955 90Private kitchen 79 59Private toilet 73 45Water supply and sewer pipelines 61 52

Urban construction

In 2001, the city government of Hebi decided to turn the QibinDistrict into an economic, cultural and administrative center forHebi (Interview 08031803). A new plan was designed to reinforceQibin’s cultural, educational, and sanitation infrastructure. Nearlyall the government work-units of Hebi were encouraged to buildhousing for their employees in the new district and to support Qi-bin’s development. From 1992 to 2007, 78 residential quarterswere built in Qibin by Hebi’s government’s work-units. The totalamount of floor space completed was 3162,100 sq m, which ac-counted for 78.6% of the total residential floor space of the entireQibin District (Qibinqu renmin zhengfu, 2007). These housing con-struction figures clearly show the dominant role of the local statein the development. Furthermore, the city government of Hebiencouraged enterprises in the new center of Qibin to build infra-structure by offering them tax breaks, lower construction costs,more effective administrative services and the right to use land

in selected places. Thus, schools, hospitals, and museums werebuilt with non-governmental capital (Zheng, 2008). For instance,the Hemei Group, the major mining company of Hebi, has built anumber of public facilities in Qibin, including a shopping center,a library, a museum, and residential estates for its own staff andworkers. The Group’s campus was constructed at the cost of 54 bil-lion yuan, and it occupies 1440 mu of land (about 96 hectares or240 acres) where 20,000 persons reside (Hemei jituan, 2002). Fur-thermore, to facilitate Qibin’s future growth, an adjacent markettown was incorporated into the Qibin District in 2008 throughadministrative means.

Results of the production of new space

As in other mining cities in China, Hebi’s environmental andliving conditions were poor. The construction of the new districthas provided many of the city’s residents a better place to live. Ingeneral, housing in the new district is much more spacious thanthat in the old city. Our fieldwork reveals that 46% of the housingunits in the new district have more than 100 sq m of living space,compared with 13% of units in the old district. Only 3% of thehousing units in the new district have less than 30 sq m of livingspace, while in the old urban areas this figure is 22% (Table 3).Housing in the new district also offers better facilities. For in-stance, about 79% of the housing units in the new district havea kitchen, but only 59% of housing units in the old districts havea kitchen; 73% of the housing units in the new district have a pri-vate bathroom, while only 45% of units in the old districts haveone.

Second, Hebi’s financial resources, investment and GDP all in-creased rapidly (Fig. 5). GDP grew from some 20 billion yuan in1992 to nearly 400 billion yuan in 2009, and investment grew fromless than 10 billion yuan to around 300 billion yuan. During thesame period, the financial resources of Hebi also grew from lessthan 2 billion yuan to nearly 20 billion yuan. Between 1992 and2009, however, the built-up areas of Hebi increased by 2.3 times,while the population just increased by 60%. This shows thatalthough the production of new space in Qibin by the local statewas quick and effective, the space was underutilized becauseemployment opportunities were still limited; this made a rapidpopulation increase impossible. Although considerable progresshad been made in bringing in enterprises unrelated to coal, thescale of the new economy in Qibin was still quite small. As Table4 shows, Hebi’s dominant industries in 2006 were still related to

109 yuan 109 yuan

0

100

200

300

400

92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09

GD

P,In

vest

men

t

0

5

10

15

20

Fina

ncia

l res

ourc

es

GDPInvestmentFinancial resources

Fig. 5. The growth of Hebi’s GDP, investment and financial resources, 1992–2009.Source: Bureau of Statistics of Hebi (2007–2010).

Table 4Major indicators of economic development in Hebi’s new and old districts. (unit:100 million yuan). Source: Hebi statistical yearbook (2007).

Newdistrict

Olddistricts

New district/olddistricts

GDP 61.3 162.2 3/8GDP from the manufacture

sector35.9 135.6 1/4

GDP from the service sector 22.1 20.3 1/1Value-added by industries 8.5 25.5 1/3Profit tax from large

enterprises1.2 2.2 4/7

Y. Liu et al. / Cities 29 (2012) 107–117 115

coal production in the old mining areas. It is noteworthy that theQibin District’s GDP from the service sector was comparable to thatof the old mining zones, but its GDP from manufacturing, valueadded by industries and income from large firms’ profit taxes wereall much less than those from mining. Unless more new enterprisescan be brought in and new jobs created, the enormous efforts madeby the local state to make Qibin a new engine of growth for Hebiwill not be met with satisfying results, and the vast land resourceswill continue to be underutilized. Nonetheless, local officials main-tain that this newly produced city space has been successful. Qi-bin’s EDTZ has won awards for being a ‘‘Garden District,’’ a‘‘Civilized Urban District’’, and one of the ‘‘top 10 EDTZs of HenanProvince,’’ and it has also won ‘‘China’s Residential EnvironmentAward’’. These awards have been taken by the local leaders as evi-dence of achievement.

Nevertheless, because Hebi’s financial resources have been lim-ited, the creation of the new center at Qibin has been accompaniedby two problems. First, as the city turned its attention to the con-struction of Qibin, conditions in the city’s old urban areas haveworsened. For instance, the new district obtained the majority ofland supply, investment in fixed assets, and fiscal expendituresfrom 2001 to 2006 at the expense of the old urban districts. How-ever, most of the jobs and tertiary services of the city, such as shopsand restaurants, were still mainly concentrated in the old urbanareas. Thus, the original goal of the city to make Qibin a new engineof growth has not been accomplished. Second, while some basicinfrastructure and urban services have been constructed for Qibin’snew residents, they are not yet sufficient. High housing costs anddeficient urban services and facilities have discouraged many peo-ple from moving to the new district voluntarily. In fact, some of theresidents in the new district have moved back to the old district(Interview 07090301-06). Some residents doubt that the new dis-trict will develop in the near future (Interview 08031802). Someshops and marketplaces have also moved back to the old districtas a result of being unable to bear the high operating and livingcosts in the Qibin District. A negative circle of growth seems to

have been formed that may jeopardize the sustainable develop-ment of the new district. However, as the development of the QibinDistrict is still at an early stage, its long-term future cannot be pre-dicted at this time.

Local state and administrative urbanization in China

In the last three decades, powerful internal and external forcesof changes have had a major impact on China’s economic and ur-ban growth. China’s national developmental strategies of market-ization and decentralization have been accompanied by thearrival of globalized production, and together these forces havegiven rise to a new regime of capital accumulation that immedi-ately replaced the socialist regime of production when China’s re-form program was initiated in 1978. Since then, economic andurban change at the regional and city levels has been guidedmainly by the local state, which in the last two decades has be-come increasingly entrepreneurial. The role of the local state inregional and urban development is more than simply being afacilitator that provides institutional support; the local state isalso a major player and stakeholder that is directly involved inlocal economic growth and urban construction. This is especiallythe case in inland cities, where the effect of foreign investmenton the local economy and society is generally not as strong asin the coastal cities. This study has shown how the local statein Hebi has powerfully shaped the direction of Hebi’s develop-ment through administrative means during the post-reform era.Chinese cities during the socialist period were little more thanspatial containers where state-run units of production and gov-ernment offices were located. The primary goal of the socialistcity was to support socialist industrialization, and no city enjoyedany economic autonomy or existed as an independent economicentity.

The initiation of China’s reform program in 1978 was followedby a fundamental shift in the role of the state in urban develop-ment. Whereas it was the central state that monopolized all as-pects of the nation’s economic and urban development, includingthe determination of the key economic function of a city, the allo-cation of development resources and urban construction, duringthe reform era the local state has been the dominant force shapinga city’s trajectory of growth, while the central state has been lim-ited to providing broad guidelines for national and local economicand urban development. Cities in the post-reform period have be-come independent economic entities that are expected to generatetheir own financial resources in a highly competitive marketizedenvironment.

This case study of the changes at Hebi City, Henan Province,provides some details on how the local state has played a powerfulrole in shaping local economic development as well as in reconfig-uring the city’s spatial patterns. The strong and highly visible handof the local state at Hebi has given rise to a new urban space, Qibin,with the expectation that the new space would help transform He-bi’s traditional coal-based economy and upgrade its economicstructure and functions. The local state was instrumental in con-ceiving, designing and producing a new urban center for the city.To turn the new space into a new place of employment and resi-dence, the government of Hebi ordered its subordinate units tomove to the new center and mobilized the population to workand settle there. A number of new enterprises were attracted tothe new area. This type of local state-dominated space productionand place making in Hebi City is widely found in post-reformChina.

A unique model of urbanization that is guided by central urbanpolicies and forged by the local state has emerged in post-reformChina. In this model, the local state uses the enormous administra-

116 Y. Liu et al. / Cities 29 (2012) 107–117

tive and fiscal powers granted by the central state to reach the de-sired goals it sets for itself. The goals almost invariably reflect thecentral state’s broad guidelines for national economic and socialdevelopment. Through a series of local policies and institutionalarrangements, including planning, the reorganization of localspace, place-marketing, the formation of public-private coalitionsfor development, planned migration, and the marketization of landuse rights to generate developmental capital, the local state strivesto attain the goals of local economic and urban development, goodor bad, that it has set for itself. The implementation of these poli-cies and measures relies heavily on administrative orders handeddown through the highly effective administrative/spatial hierarchyof the local Party-state. From this perspective, the Chinese model ofurbanization described in this study can be characterized as‘‘administrative urbanization’’ that has given rise to new urbaneconomic and social structures and new spatial orders in differentChinese cities.

The Chinese model of administrative urbanization, with thelocal state playing a dominant role, differs markedly from themodels of urban growth in Western nations, such as the ‘‘growthmachines’’ and ‘‘urban regimes’’, where the central state rarelybecomes involved in local affairs and where the local state nor-mally is just one of the key players in local urban growth.Whereas good governance is a key concern of the local state inWestern nations, effective ‘‘management’’ or control by the statethrough administrative means (guan), which in reality borderson authoritarian political control, is a basic feature of Chineseurbanization and urban policy. As such, the production of urbanspace and city-making in China are essentially state projects.There is little doubt that China’s state-dominated model ofadministrative urbanization can quickly produce dramatic eco-nomic and urban outcomes, but whether the results are benefi-cial to the urban and rural residents involved in local urbantransformation is much less clear. Issues such as widespreadprotests by peasants whose land has been taken away by thestate for urban development without adequate compensation,and by urban residents who are forced to relocate so as to makeroom for the construction of new urban areas, have been widelyanalyzed by scholars and reported by journalists. Our case studyof Hebi begs the questions of: for whom are the dramatic urbanand spatial changes being pursued and who has benefited themost from this type of urbanization? The case study shows thatthe new enterprises have not been able to fundamentally alterthe basic nature of the local economy in a short period of time.This may be due to the short development history and becauseof the city’s inland location, where the general level of the regio-nal economy is considerably lower than that of the coastal re-gion and the overall technical, social and living environmentsare not uniquely attractive to potential investors. The study alsobegs the question as to what are the alternative approaches tolocal economic and urban development other than followingthe central state’s call for the development of a high tech-basedeconomy, which has been duplicated almost blindly by numer-ous cities all over China.

As we noted earlier in the paper, case studies of medium-sizedand small cities in China are rare, and more studies are needed totest the validity of the new Chinese model of administrative urban-ization that we have proposed. One key area that needs to be ex-plored further is the extent to which the local state has been anentrepreneurial state. We need detailed accounts on how a localstate negotiates with potential real estate developers, financiersand enterprises, what the mind-set of the local leaders is in thelong term local economic and urban development, how the localeconomic and urban changes have affected the career paths of localofficials, how local government coffers have been enhanced by thelease of land use rights and through tax revenues, and what the

long-term consequences of local state-dominated administrativeurbanization and city growth are.

Acknowledgements

This article is funded by the National Natural Science Founda-tion of China (40701041 and 40971095); Scientific Research Foun-dation for the Returned Overseas Chinese Scholars, State EducationMinistry; Project of the 11th 5-year Plan of Philosophy and SocialScience of Guangdong Planning (2009). The authors would like toacknowledge the input by Dr. Zhigang Li of the Department of Ur-ban and Regional Planning, Sun Yat-sen University, which signifi-cantly improved the quality of the paper. We also wish toacknowledge the reviewers for his comments and suggests withthe preliminary draft of this article.

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